Chirico Clinic uses client-visits as its measure of activity.During February, the clinic budgeted for 2, 500 client-visits, but its actual level of activity was 2, 550 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting: Actual results for February: The occupancy expenses in the flexible budget for February would be closest to:
A)$14, 450
B)$14, 575
C)$14, 948
D)$14, 368

Question

Chirico Clinic uses client-visits as its measure of activity.During February, the clinic budgeted for 2, 500 client-visits, but its actual level of activity was 2, 550 client-visits.The clinic has provided the following data concerning the formulas used in its budgeting and its actual results for February: Data used in budgeting:  Actual results for February:  The occupancy expenses in the flexible budget for February would be closest to:
A)$14, 450 
B)$14, 575 
C)$14, 948 
D)$14, 368

Quizplus · Accepted Answer

Cost = Fixed cost + (Variable cost per unit × q)
= $8, 200 + ($2.50 × 2, 550)= $14, 575

Chirico Clinic Uses Client-Visits as Its Measure of Activity